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Anti-assignment clauses and Standing: D.N.J.

03-23-2018, 10:18 AM

In a recent case from New Jersey, the court takes up the familiar issue of anti-assignment clauses. The patient (and also a plaintiff to the case) underwent surgery with out-of-network providers. As a result, the patient assigned his benefits that he received through his wife's employer to the doctor and facility (also plaintiffs in the case). After refusing to reimburse the facility for the full cost of the procedures, the Plaintiff's brought this action. The Defendant moved to dismiss the claim on the grounds that the Plaintiff's lack standing, as the Plan contains an anti-assignment clause.

Although the Third Circuit has yet to address the validity of anti-assignment clauses, courts in this District have found similar provisions to be valid and enforceable. This is consistent with the majority of circuits, which “have concluded that an assignment is ineffectual if the plan contains an unambiguous antiassignment provision.” “[A] clear and definite no-assignment provision may be construed in no other way but that any attempted assignment of either the contract or any rights created thereunder shall be void as against the obligor.” “In interpreting the provisions of an ERISA plan, the terms of the policy ‘must be given their plain meanings, meanings which comport with the interpretations given by the average person.” “Whether an ERISA plan is ambiguous is a question of law.” “A term is ambiguous if it is subject to reasonable alternative interpretations.” Here, the Benefits Not Transferable provision has different language than other anti-assignment provisions; however, two other courts have construed them similarly. ’ In fact, another district court recently held that this exact provision is an enforceable anti-assignment clause. Here, the Court is satisfied that the plain meaning of the Benefits Not Transferable provision “is that the assignment of benefits is unambiguously prohibited under any circumstances.” Id. Because the Plan’s Benefits Not Transferable provision clearly prohibits Adrian P.’s Assignment of Benefits, it is invalid. (Citations omitted).

Ultimately, the court found that while the doctor and medical center lacked standing, the patient did not. As such, the court denied the Defendant's motion to dismiss with respect to the patient's claims. The opinion is attached below.